<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1996
COMMISSION FILE NUMBER 0-2816
METHODE ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 36-2090085
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
<TABLE>
<S> <C>
7444 WEST WILSON AVENUE
CHICAGO, ILLINOIS 60656
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER (INCLUDING AREA CODE): (708) 867-9600
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
None None
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
CLASS A COMMON STOCK ($.50 PAR VALUE)
CLASS B COMMON STOCK ($.50 PAR VALUE)
(TITLE OF CLASS)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [_] .
The aggregate market value of the Class A and Class B Common Stock, $.50 par
value, held by non-affiliates of the Registrant on July 15, 1996 based upon
the average of the closing bid and asked prices on that date as reported by
Nasdaq was $571,975,000.
Registrant had 34,101,878 shares of Class A, $.50 par value, and 1,233,247
shares of Class B, $.50 par value, outstanding as of July 15, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the annual shareholders meeting to be
held September 10, 1996, are incorporated by reference into Part III.
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<PAGE>
PART I
ITEM 1. BUSINESS
Methode Electronics, Inc. was incorporated in 1946 as an Illinois
corporation and reincorporated in Delaware in 1966. As used herein, Methode
Electronics, Inc. shall be referred to as the "Registrant" or the "Company".
The Registrant operates in one industry segment, which consists of the
manufacture of electronic components and devices that connect, control and
convey electrical energy, pulse and signal, including connectors, automotive
components, interconnect devices, printed circuits, and current carrying
distribution systems. Components and devices manufactured by the Registrant
are used in the production of electronic equipment and other products with
applications in the automotive, computer, voice and data communications
equipment, industrial, military and aerospace, and consumer electronics
industries.
The following tabulation reflects the percentages of net sales of the major
classes of products of the Registrant for the last three fiscal years:
<TABLE>
<CAPTION>
APRIL 30,
----------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Connectors and Controls................................. 86.0% 86.0% 88.6%
Printed Circuit Boards and Services..................... 6.7 5.5 4.4
Current Carrying Distribution Systems................... 7.3 8.5 7.0
</TABLE>
The sales activities of the Registrant are directed by sales managers who
are supported by engineering personnel who provide technical services. The
Registrant's products are sold through its sales staff and through independent
manufacturers' representatives with offices throughout the world. Sales are
made primarily to original equipment manufacturers and also to independent
distributors.
Sources and Availability of Raw Materials. Principal raw materials purchased
by Registrant include copper-clad laminate, ferrous and copper alloy strips,
plastic molding materials, fiber optic cable, etching and plating chemicals,
die castings and precious metals. All of these items are available from
several suppliers, and the Registrant generally relies on more than one for
each item.
Patents; Licensing Agreements. The Registrant has various patents and
licensing agreements, but does not consider its business to be materially
dependent upon such patents and licensing agreements.
Seasonality. The business of the Registrant is not seasonal.
Working Capital Items. The Registrant is required to maintain adequate
levels of inventory to meet scheduled delivery requirements of customers. It
is not normal for the Registrant to carry significant amounts of finished
goods, as the preponderance of orders received are for scheduled future
deliveries.
Material Customers. During the year ended April 30, 1996, shipments to
Chrysler Corporation and Ford Motor Corporation each were 10% or greater of
consolidated net sales and, in the aggregate, amounted to approximately 40% of
consolidated net sales. Such shipments included a wide variety of the
Registrant's automotive component products.
Backlog. The Registrant's backlog of orders for its continuing operations
was approximately $53,100,000 at May 31, 1995 and $55,200,000 at May 31, 1996.
It is expected that most of the total backlog at May 31, 1996 will be shipped
within the current fiscal year.
Contracts Subject to Termination at the Election of the Government.
Shipments as a subcontractor for various military programs constitute a
significant portion of the Registrant's multi layer printed circuitry output,
2
<PAGE>
although not material to the Registrant's business as a whole. Although
existing government orders are subject to termination at the election of the
Government, the Registrant historically has never experienced a significant
termination and has no information to lead it to believe that there is a
likelihood of such an event during fiscal year 1997.
Competitive Conditions. The markets in which the Registrant operates are
highly competitive and characterized by rapid changes due to technological
improvements and developments. Registrant competes with a large number of
other manufacturers in each of its product areas; many of these competitors
have greater resources and total sales. Price, service and product performance
are significant elements of competition in the sale of Registrant's products.
Research and Development. Registrant maintains a Research and Development
program involving a number of professional employees who devote a majority of
their time to the development of new products and processes and the
advancement of existing ones. Senior management of the Registrant also
participates directly in the program. Expenditures for the aforementioned
activities amounted to $11,120,000, $14,120,000 and $17,425,000 for the fiscal
years ended April 30, 1994, 1995 and 1996, respectively.
Environmental Quality. Compliance with federal, state and local provisions
regulating the discharge of materials into the environment has not materially
affected capital expenditures, earnings or the competitive position of the
Registrant. Currently, there are no environmental-related lawsuits or material
administrative proceedings pending against the Registrant. Further information
as to environmental matters affecting the Registrant is presented in Note 7 to
the consolidated financial statements included in Item 14(a)(1).
Employees. At April 30, 1995 and 1996, Registrant had approximately 3,000
and 3,250 employees, respectively.
Foreign Sales. Information about the Registrant's operations in different
geographic regions is summarized in Note 9 to the consolidated financial
statements included in Item 14 (a) (1).
ITEM 2. PROPERTIES
The Registrant has 19 manufacturing and three service facilities containing
approximately 785,000 square feet of space, of which approximately 118,000
square feet are leased. Ten of the facilities are located in Illinois, four in
California, one in Connecticut, one in New Jersey, one in Maryland, one in
Ireland, two in Singapore and two in the United Kingdom. Approximately 90,000
square feet of space for the manufacture of connectors and controls was added
in fiscal 1995 and 38,000 square feet of manufacturing space and a 20,000
square foot Research Center was added in 1996. The Registrant expects to
occupy a new 40,000 square foot automotive component manufacturing facility in
Suzhou, China outside Shanghai in the second half of fiscal 1997. Management
believes that the Registrant's production capacity is sufficient to supply
current orders and anticipated increased demands. Registrant's manufacturing
facilities have been modernized as necessary in the opinion of management to
keep pace with developments in the electronics industry.
ITEM 3. LEGAL PROCEEDINGS
As of July 15, 1996, the Registrant was not involved in any material
litigation or any litigation or material administrative proceedings with
governmental authorities pertaining to the discharge of materials into the
environment.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to security holders during the fourth
quarter of fiscal 1996.
3
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
NAME AGE OFFICES AND POSITIONS HELD AND LENGTH OF SERVICE AS OFFICER
---- --- -----------------------------------------------------------
<S> <C> <C>
William J. 73 Chairman of the Board of the Registrant since December, 1994.
McGinley Prior thereto, he was President and a Director since 1946.
Mr. William J. McGinley is the father of James W. McGinley.
William T. 69 President of the Registrant since December, 1994. Prior there-
Jensen to, he was Senior Executive Vice President since 1992. Execu-
tive Vice President since 1952 and a Director since 1959.
Michael G. 56 Senior Executive Vice President of the Registrant since Decem-
Andre ber, 1994. Prior thereto, he was Executive Vice President--
Interconnect Products Group since January, 1984 and a Direc-
tor since September, 1984.
Kevin J. 55 Chief Financial Officer since 1996 and Assistant Secretary
Hayes since 1995. Prior thereto, he was Vice President since 1974
and a Director since September, 1984. Treasurer 1972 to 1996.
James W. 46 Secretary since 1995. Partner--Keck, Mahin & Cate (a law firm
Ashley, retained as counsel to the Registrant).
Jr.
James W. 41 President since December, 1994 and prior thereto Executive
McGinley Vice President, Optical Interconnect Products Group. Director
since June 1993. Prior thereto, he was General Manager of the
Company's Connector Division from November 1984 to January
1989, and was Vice President, Corporate Sales and Marketing
from January 1989 to June 1993. Mr. James W. McGinley is the
son of Mr. William J. McGinley.
</TABLE>
All executive officers serve a term of office of one year which, for the
current year, expires on September 10, 1996, or until their successors are
duly elected and qualified.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Registrant's Class A and Class B Common Stock are traded on the Nasdaq
National Market System under the symbols METHA and METHB. The following is a
tabulation of high and low closing sales prices for the periods indicated as
reported by Nasdaq. Historical data has been restated for the three for two
stock split effective October 31, 1995.
<TABLE>
<CAPTION>
CLASS A CLASS B
STOCK PRICE STOCK PRICE
----------- -----------
HIGH LOW HIGH LOW
----- ----- ----- -----
<S> <C> <C> <C> <C>
Fiscal Year ended April 30, 1996
First Quarter................................... 14.83 11.00 15.00 11.67
Second Quarter.................................. 16.17 14.17 16.33 14.33
Third Quarter................................... 16.25 12.63 16.25 13.25
Fourth Quarter.................................. 16.75 13.50 16.75 13.75
Fiscal Year ended April 30, 1995
First Quarter................................... 11.67 9.83 11.67 10.67
Second Quarter.................................. 13.67 10.50 14.33 11.00
Third Quarter................................... 13.00 8.75 14.17 9.83
Fourth Quarter.................................. 11.67 8.67 12.33 11.00
</TABLE>
The Registrant pays dividends quarterly and for fiscal year 1995, it paid at
an annual rate of $.080 and $.067 on the Class A and Class B Stock. In fiscal
1996, quarterly dividends were paid at an annual rate of $.16 on both the
Class A and Class B Common Stock. On June 21, 1996, the Board voted to
increase the cash dividend on its
4
<PAGE>
Class A and Class B Common Stock to an annual rate of $.20, and declared a
dividend of $.05 per Class A share and Class B share, payable on July 31, 1996
to holders of record on July 15, 1996.
The Registrant expects to continue its policy of paying regular cash
dividends, although there is no assurance as to future dividends because they
are dependent on future earnings, capital requirements and financial
condition.
As of July 15, 1996, the approximate number of record holders of the
Company's Class A Stock was 1,300 and the approximate number of record holders
of the Company's Class B Stock was 540.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Income Statement Data
Net sales.................. $307,538 $270,748 $213,298 $172,038 $148,085
Income from continuing
operations before income
taxes..................... 50,572 40,846 33,476 22,548 13,614
Income Taxes............... 18,600 14,725 12,500 7,800 4,085
Income from continuing
operations................ 32,373 26,121 20,976 14,748 9,529
Discontinued operations
(loss).................... -- -- -- 690 (4,898)
Net income................. 32,373 26,121 20,976 15,438 4,632
Per Common Share:
Income from continuing
operations.............. $ .93 $ .75 $ .61 $ .43 $ .29
Net income............... .93 .75 .61 .45 .14
Dividends, Class A....... .16 .08 .03 .03 .03
Dividends, Class B....... .16 .07 .03 .03 .02
Book value............... 4.69 3.87 3.11 2.47 1.98
Long-term debt............. -- -- 107 204 301
Funded debt to total
capital................... 1:57 1:28 1:21 1:35 1:59
Retained earnings.......... $131,073 $104,323 $ 80,963 $ 61,165 $ 46,662
Fixed assets (net)......... 66,786 56,167 48,454 44,419 35,265
Total assets............... 223,279 191,476 160,630 129,029 106,986
From continuing operations:
Return on equity......... 22% 22% 22% 19% 15%
Pretax income as % of
sales................... 16.6% 15.1% 15.7% 13.1% 9.2%
Income as % of sales..... 10.5% 9.6% 9.8% 8.6% 6.4%
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales increased 14% in fiscal 1996 following increases of 27% and 24% in
1995 and 1994, respectively, led by gains in sales of connectors and
automotive components of 17% in 1996, 22% in 1995 and 27% in 1994. Sales of
electronic and optical connectors and automotive components represented 89% of
sales in fiscal 1996 and 86% in 1995 and 1994. Connector sales during the
three year period ended April 30, 1996 benefitted from the acquisition of a
PCMCIA connector and package producer in the second quarter of fiscal 1996;
acquisitions of two molded cable operations in the second quarter of fiscal
1995; and purchase of a fiber optic connector business in the second quarter
of fiscal 1994. Methode connectors and components are used broadly in voice
and data communications networks, automobiles, computers, industrial
automation equipment and consumer electronics. Sales of other connectivity
devices (chiefly buss devices and printed circuit boards) and services
declined 8% in fiscal 1996 versus gains of 72% and 1% in fiscal 1995 and
fiscal 1994. This area experienced difficult market conditions as a result of
less than anticipated sales of mainframe computers (for which Methode
5
<PAGE>
supplies power and signal distribution busswork) and reduced defense
procurement (for which Methode provides sophisticated multilayer circuit
boards). Management is taking action to broaden the markets for these
products.
Other income consisted primarily of earnings from our automotive joint
venture, interest income from short-term investments, and royalties.
Cost of goods sold as a percentage of sales for 1996, 1995 and 1994 were
72.1%, 72.8% and 71.9%.
Selling and administrative expenses as a percentage of sales were 12.9%,
13.3% and 13.4% in 1996, 1995 and 1994, respectively.
Effective income tax rates were 36.5%, 36.1% and 37.3% for fiscal 1996, 1995
and 1994, respectively. The effective income tax rates exceed the statutory
federal rate of 35% due to the effect of state income taxes offset, in part,
by lower tax rates on foreign operations.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
Net cash provided by operations was $43,429,000, $37,320,000, and
$16,896,000 in 1996, 1995 and 1994, primarily as a result of higher net
income. Average collection period increased slightly to 52 days in 1996 from
51 days in 1995 and 53 days in 1994 balanced by a slight increase in inventory
turnover to 6.8 turns in 1996 from 6.5 turns in 1995 and 6.7 turns in 1994.
Depreciation expense was $12,117,000, $10,608,000 and $8,988,000 in fiscal
1996, 1995 and 1994, respectively, reflecting higher levels of fixed assets in
each year. Capital expenditures were $22,124,000, $17,422,000 and $12,697,000
in fiscal 1996, 1995 and 1994. Principal capital investments involved
expansions at our Automotive Electronic Controls, Optoelectronic Products and
Fiber Optic Products facilities in 1996 and a new test lab in 1995. Capital
expenditures in 1996, 1995 and 1994 were funded from operating cash flows. It
is anticipated that fixed capital acquisitions for 1997 will also be funded
from operating cash flows.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 14 for an Index to Financial Statements and Financial Statement
Schedules. Such Financial Statements and Schedules are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the directors of the Registrant is included under the
caption "Election of Directors" in the Registrant's proxy statement to be
dated on or about August 9, 1996, and is incorporated herein by reference.
Information regarding the executive officers of the Registrant is included
under a separate caption in Part I hereof, and is incorporated herein by
reference, in accordance with General Instruction G(3) to Form 10-K and
Instruction 3 to Item 401(b) of Regulation S-K.
ITEM 11. EXECUTIVE COMPENSATION
Information regarding the above is included under the caption "Executive
Compensation" in the Registrant's proxy statement to be dated on or about
August 9, 1996 and is incorporated herein by reference.
6
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding the above is included under the caption "Security
Ownership" in the Registrant's proxy statement to be dated on or about August
9, 1996 and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding the above is included under the caption "Election of
Directors" in the Registrant's proxy statement to be dated on or about August
9, 1996 and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) (2) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The response to this portion of Item 14 is included in this report under
the caption "List of Financial Statements and Financial Statement
Schedules" which is incorporated herein by reference.
(a) (3) LIST OF EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K
See "Exhibit Index" immediately following the financial statement
schedules.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.
(c) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K
See "Exhibit Index" immediately following the financial statement
schedules.
(d) FINANCIAL STATEMENT SCHEDULES
The response to this portion of Item 14 is included in this report under the
caption "List of Financial Statements and Financial Statement Schedules" which
is incorporated herein by reference.
Schedules and exhibits other than those listed are omitted for the reasons
that they are not required, are not applicable or that equivalent information
has been included in the financial statements, and notes thereto, or elsewhere
herein.
7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Methode Electronics, Inc.
(Registrant)
By: _________________________________
Kevin J. Hayes
Chief Financial Officer &
Director
Dated: July 26, 1996
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chairman of the Board & July 26, 1996
____________________________________ Director (Principal
William J. McGinley Executive Officer)
President & Director July 26, 1996
____________________________________
William T. Jensen
Senior Executive Vice July 26, 1996
____________________________________ President & Director
Michael G. Andre
Chief Financial Officer & July 26, 1996
____________________________________ Director
Kevin J. Hayes
President, Optical July 26, 1996
____________________________________ Interconnect Products, &
James W. McGinley Director
Secretary & Director July 26, 1996
____________________________________
James W. Ashley
Director July 26, 1996
____________________________________
William C. Croft
Director July 26, 1996
____________________________________
Raymond J. Roberts
Director July 26, 1996
____________________________________
George C. Wright
</TABLE>
8
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
FORM 10-K
ITEM 14(A)(1) AND (2)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Methode Electronics, Inc.
and subsidiaries are included in Item 8:
Consolidated Balance Sheets--April 30, 1996 and 1995
Consolidated Statements of Income--Years Ended April 30, 1996, 1995 and
1994
Consolidated Statements of Shareholders' Equity--Years Ended April 30,
1996, 1995 and 1994
Consolidated Statements of Cash Flows--Years Ended April 30, 1996, 1995
and 1994
Notes to Consolidated Financial Statements
The schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inappropriate and, therefore, have been
omitted.
9
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Methode Electronics, Inc.
We have audited the accompanying consolidated balance sheets of Methode
Electronics, Inc. and subsidiaries as of April 30, 1996 and 1995, and the
related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended April 30, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Methode
Electronics, Inc. and subsidiaries at April 30, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended April 30, 1996, in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
June 18, 1996
10
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ 50,185,934 $ 40,763,656
Accounts receivable, less allowance
(1996--$1,285,000; 1995--$1,295,000)............. 48,326,214 39,467,500
Inventories:
Finished products............................... 5,199,125 5,213,948
Work in process................................. 15,330,639 16,863,248
Materials....................................... 11,557,591 10,845,224
------------ ------------
32,087,355 32,922,420
Current deferred income taxes..................... 3,029,000 3,601,000
Prepaid expenses.................................. 3,382,073 2,939,338
------------ ------------
Total current assets.......................... 137,010,576 119,693,914
OTHER ASSETS
Intangible benefit plan asset (Note 5).............. 3,601,793 4,269,525
Cash surrender value of life insurance.............. 5,939,690 5,019,519
Other............................................... 9,941,495 6,346,333
------------ ------------
19,482,978 15,635,377
PROPERTY, PLANT AND EQUIPMENT
Land................................................ 1,684,985 1,184,310
Buildings and building improvements................. 32,757,588 28,222,215
Machinery and equipment............................. 118,065,196 103,334,376
------------ ------------
152,507,769 132,740,901
Less allowances for depreciation.................... 85,721,950 76,574,297
------------ ------------
66,785,819 56,166,604
------------ ------------
$223,279,373 $191,495,895
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................. $ 23,448,875 $ 19,997,465
Salaries, wages and payroll taxes................. 7,355,329 5,977,969
Other accrued expenses............................ 9,367,295 10,410,379
Federal and state income taxes.................... 2,845,202 2,219,351
Notes payable..................................... 2,939,380 5,067,450
------------ ------------
Total current liabilities..................... 45,956,081 43,672,614
Accumulated benefit plan obligation (Note 5)........ 2,999,422 3,629,330
Other liabilities................................... 1,918,391 2,616,815
Deferred compensation............................... 7,301,175 6,654,879
SHAREHOLDERS' EQUITY (NOTE 3)
Common Stock, Class A............................... 17,036,666 11,025,006
Common Stock, Class B............................... 624,450 640,483
Stock Awards........................................ (969,745) (988,015)
Additional paid-in capital.......................... 15,249,444 17,106,383
Retained earnings................................... 131,073,343 104,322,709
Foreign currency translation adjustment............. 2,134,352 2,859,897
------------ ------------
165,148,510 134,966,463
Less cost of shares in treasury..................... 44,206 44,206
------------ ------------
165,104,304 134,922,257
------------ ------------
$223,279,373 $191,495,895
============ ============
</TABLE>
See notes to consolidated financial statements.
11
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
--------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Net sales (Note 9).................... $307,538,466 $270,747,848 $213,297,846
Other................................. 4,945,265 3,732,237 2,461,106
------------ ------------ ------------
312,483,731 274,480,085 215,758,952
Costs and expenses:
Cost of products sold................. 221,605,285 197,215,648 153,370,316
Selling and administrative expenses... 39,571,740 36,056,404 28,513,994
Interest expense...................... 334,092 361,644 398,215
------------ ------------ ------------
261,511,117 233,633,696 182,282,525
------------ ------------ ------------
Income before income taxes.............. 50,972,614 40,846,389 33,476,427
Income taxes (Note 6)................... 18,600,000 14,725,000 12,500,000
------------ ------------ ------------
Net income.......................... $ 32,372,614 $ 26,121,389 $ 20,976,427
============ ============ ============
Amounts per Common Share (Note 3):
Net income............................ $.93 $.75 $.61
Cash dividends:
Class A............................. $.16 $.08 $.03
Class B............................. $.16 $.07 $.03
Weighted average number of Common
Shares outstanding................... 34,967,000 34,671,000 34,506,000
</TABLE>
See notes to consolidated financial statements.
12
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED APRIL 30, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
FOREIGN
COMMON COMMON ADDITIONAL CURRENCY
STOCK, STOCK, STOCK PAID-IN RETAINED TRANSLATION TREASURY
CLASS A CLASS B AWARDS CAPITAL EARNINGS ADJUSTMENT STOCK
----------- -------- ----------- ----------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at May 1, 1993.. $10,859,160 $646,857 $ (500,287) $11,757,411 $ 61,165,121 $ 864,013 $(44,206)
Stock Award grant of
160,328 shares of
Common Stock, Class A.. 53,443 -- (1,229,178) 1,175,735 -- -- --
Earned portion of Stock
Awards................. -- -- 1,009,401 -- -- -- --
Tax benefit from
appreciation of Stock
Awards................. -- -- -- 788,000 -- -- --
Issuance of 153,744
shares of Common Stock,
Class A (Note 2)....... 51,247 -- -- 1,073,984 -- -- --
Conversion of 8,024
shares of Common Stock,
Class B, to 8,024
shares of Common Stock,
Class A................ 4,011 (4,011) -- -- -- -- --
Foreign currency
translation adjustment. -- -- -- -- -- 408,067 --
Net income for the year. -- -- -- -- 20,976,427 -- --
Cash dividends on Common
Stock.................. -- -- -- -- (1,178,490) -- --
----------- -------- ----------- ----------- ------------ ---------- --------
Balance at April 30,
1994................... 10,967,861 642,846 (720,064) 14,795,130 80,963,058 1,272,080 (44,206)
Stock Award grant of
164,348 shares of
Common Stock, Class A.. 54,782 -- (1,767,035) 1,712,253 -- -- --
Earned portion of Stock
Awards................. -- 1,499,084 -- -- -- --
Tax benefit from
appreciation of Stock
Awards................. -- -- -- 599,000 -- -- --
Conversion of 4,725
shares of Common Stock,
Class B, to 4,725
shares of Common Stock,
Class A................ 2,363 (2,363) -- -- -- -- --
Foreign currency
translation adjustment. -- -- -- -- -- 1,587,817 --
Net income for the year. -- -- -- -- 26,121,389 -- --
Cash dividends on Common
Stock.................. -- -- -- -- (2,761,738) -- --
----------- -------- ----------- ----------- ------------ ---------- --------
Balance at April 30,
1995................... 11,025,006 640,483 (988,015) 17,106,383 104,322,709 2,859,897 (44,206)
Stock Award grant of
169,062 shares of
Common Stock, Class A.. 56,354 -- (1,910,688) 1,854,334 -- -- --
Earned portion of Stock
Awards................. -- -- 1,928,958 -- -- -- --
Tax benefit from
appreciation of Stock
Awards................. -- -- -- 68,000 -- -- --
Issuance of 165,708
shares of Common Stock,
Class A (Note 2)....... 55,236 -- -- 2,104,764 -- -- --
Three-for-two stock
split paid in Common
Stock, Class A......... 5,884,037 -- -- (5,884,037) -- -- --
Conversion of 32,066
shares of Common Stock,
Class B, to 32,066
shares of Common Stock,
Class A................ 16,033 (16,033) -- -- -- -- --
Foreign currency
translation adjustment. -- -- -- -- -- (725,545 ) --
Net income for the year. -- -- -- -- 32,372,614 -- --
Cash dividends on Common
Stock.................. -- -- -- -- (5,621,980) -- --
----------- -------- ----------- ----------- ------------ ---------- --------
Balance at April 30,
1996................... $17,036,666 $624,450 $(969,745) $15,249,444 $131,073,343 $2,134,352 $(44,206)
=========== ======== =========== =========== ============ ========== ========
</TABLE>
See notes to consolidated financial statements.
13
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED APRIL 30,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income.......................... $ 32,372,614 $ 26,121,389 $ 20,976,427
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for depreciation and
amortization..................... 12,117,010 10,608,121 8,988,054
Provision for losses on accounts
receivable....................... 35,000 157,000 155,000
Provision for deferred
compensation and supplemental
executive benefit plan........... 684,120 735,974 803,978
Provision for deferred income
taxes............................ 792,000 150,000 250,000
Amortization of Stock Awards...... 1,928,958 1,499,084 1,009,401
Changes in operating assets and
liabilities:
Accounts receivable............. (8,312,521) (2,640,227) (10,247,415)
Inventories..................... 1,061,181 (3,659,668) (8,511,944)
Current deferred income taxes
and prepaid expenses........... (548,935) (355,103) (936,757)
Accounts payable and accrued
expenses....................... 3,299,795 4,703,232 4,409,463
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES......................... 43,429,222 37,319,802 16,896,207
INVESTING ACTIVITIES
Purchases of property, plant, and
equipment.......................... (22,123,827) (17,421,612) (12,696,706)
Purchase of subsidiaries (Note 2)... -- (2,593,063) --
Purchases of life insurance
policies........................... (920,171) (493,631) (598,672)
Other............................... (2,692,727) 287,899 (209,518)
------------ ------------ ------------
NET CASH USED IN INVESTING
ACTIVITIES......................... (25,736,725) (20,220,407) (13,504,896)
FINANCING ACTIVITIES
Borrowings (repayments) on lines of
credit and long-term borrowings.... (2,648,239) (359,963) 2,671,421
Dividends........................... (5,621,980) (2,761,738) (1,178,490)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES............... (8,270,219) (3,121,701) 1,492,931
------------ ------------ ------------
Increase in cash and cash
equivalents........................ 9,422,278 13,977,694 4,884,242
Cash and cash equivalents at
beginning of year.................. 40,763,656 26,785,962 21,901,720
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF
YEAR............................... $ 50,185,934 $ 40,763,656 $ 26,785,962
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
14
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts and operations of
the Company and its subsidiaries, all of which are wholly owned.
Cash Equivalents
All highly liquid investments with a maturity of three months or less when
purchased are carried at their approximate fair value and classified in the
balance sheet as cash equivalents.
Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or
market.
Property, Plant and Equipment
Properties are stated on the basis of cost. The Company amortizes such costs
by annual charges to income, computed on the straight-line method for
financial reporting purposes and on accelerated methods for income tax
purposes.
Long-Lived Assets
In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company will adopt Statement
121 in the first quarter of 1997 and, based on current circumstances, does not
believe the effect of adoption will be material.
Research and Development Costs
Costs associated with the development of new products are charged to expense
when incurred. Research and development costs for the years ended April 30,
1996, 1995 and 1994 amounted to $17,425,000, $14,120,000 and $11,120,000,
respectively.
Earnings Per Share
Net income per Common Share is based on the weighted average number of
Common Shares outstanding. The dilutive effect on net income per Common Share
assuming the vesting of unearned Stock Awards is not significant.
Fair Value of Financial Instruments
The carrying amounts of the Company's borrowings under its short-term
revolving credit agreements approximate their fair value. The weighted average
interest rates on such borrowings for the years ended April 30, 1996, 1995 and
1994 were 5.18%, 5.28% and 4.51%, respectively.
15
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
2. ACQUISITIONS
On July 31, 1995, the Company issued 165,708 shares of Common Stock, Class A
to acquire a San Jose, California manufacturer of sonic welded packages for
the personal computer card industry.
On September 9, 1994, the Company purchased for cash, a molded cable
assembly business with operations located in North Haven, Connecticut, and
Limerick, Ireland.
On April 30, 1993, the Company issued 179,535 shares of Common Stock, Class
A, as an advance on the purchase of Mikon, Ltd., a manufacturer of fiber-optic
cable assemblies located in England. On June 28, 1993, 153,744 additional
shares of Common Stock, Class A, were issued upon completion of this
acquisition.
All three acquisitions were accounted for as purchases and, accordingly, the
financial statements reflect their results of operations since their
respective dates of acquisition. Had these acquisitions been made as of the
beginning of fiscal 1994, sales and operating results would not be materially
different than reported.
3. SHAREHOLDERS' EQUITY
Preferred Stock
The Company has 50,000 authorized shares of Series A, 4% cumulative
convertible Preferred Stock, par value $100 per share, of which none were
outstanding at April 30, 1996.
Common Stock
Common Stock, Class A, is entitled to dividends at least equivalent to those
paid on the shares of Common Stock, Class B. The Common Stock, Class A, has
more limited voting rights than the Common Stock, Class B. Generally the
holders of Common Stock, Class A, are entitled to elect 25% of the Company's
Board of Directors and are entitled to one-tenth of one vote per share
respecting other matters. Holders of Common Stock, Class B, are entitled to
one vote per share. Each share of Common Stock, Class B, is convertible into
one share of Common Stock, Class A, at the option of the holder. At April 30,
1996, 2,098,096 shares of Common Stock, Class A, are reserved for future
issuance in connection with the conversion of shares of Common Stock, Class B,
and the Company's Incentive Stock Award Plans.
In October, 1995, the Company's Board of Directors declared a three for two
stock split, paid on October 31, 1995, whereby one additional share of Class A
Common Stock was issued for each two shares of Class A and Class B Common
Stock outstanding. All share and per share data have been restated to reflect
this stock split.
Common Stock, par value $.50 per share, authorized, issued and in treasury,
was as follows:
<TABLE>
<CAPTION>
APRIL 30, 1996 APRIL 30, 1995
COMMON STOCK COMMON STOCK
-------------------- --------------------
CLASS A CLASS B CLASS A CLASS B
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Authorized...................... 50,000,000 5,000,000 50,000,000 5,000,000
Issued.......................... 34,073,331 1,248,900 33,715,501 1,280,966
In treasury..................... 134,200 12,200 134,200 12,200
</TABLE>
16
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Stock Awards
The Company has an Incentive Stock Award Plan (Incentive Plan) which permits
the issuance of up to 3,000,000 shares of Common Stock, Class A, to certain
officers and key employees of the Company, of which 2,243,013 shares have been
awarded through April 30, 1996. Pursuant to the terms of the Incentive Plan,
the granted stock does not vest until two years after the award date. If, for
any reason other than retirement, disability or death an employee terminates
his service before the two-year period, the stock will not vest and will be
made available for future grants.
The Company also has an Incentive Stock Award Plan for Non-employee Directors
which permits the issuance of up to 120,000 shares of Common Stock, Class A, to
non-employee directors, of which 66,000 shares have been awarded at April 30,
1996. Shares awarded pursuant to this plan have no vesting restrictions.
4. EMPLOYEE STOCK OWNERSHIP PLAN
The Company has an Employee Stock Ownership Plan for the benefit of full-time
employees who have completed one year of service. The purpose of the Plan is to
assist employees to accumulate capital ownership in the Company and through
that ownership to promote in them a strong interest in the successful operation
of the Company. The Company made contributions of $1,200,000 to the Plan during
both fiscal 1996 and 1995 and $1,100,000 during fiscal 1994.
5. SUPPLEMENTAL EXECUTIVE BENEFIT PLAN
In fiscal 1992, the Company adopted an unfunded defined benefit plan covering
certain key executives. Benefits under the plan are in recognition of
significant contributions to the success of the Company made by the executives
during their many years of service with the Company. Annual payments of
$900,000 pursuant to the plan are being made through fiscal year 2001.
The net periodic cost recognized as expense for this plan was as follows:
<TABLE>
<CAPTION>
PRIOR SERVICE COSTS INTEREST TOTAL
------------------- -------- ----------
<S> <C> <C> <C>
1996.............................. $667,732 $270,093 $ 937,825
1995.............................. 667,732 310,566 978,298
1994.............................. 667,732 348,426 1,016,158
</TABLE>
The weighted-average assumed discount rate used to measure the projected
benefit obligation in all years was 6 2/3%.
6. INCOME TAXES
Effective May 1, 1993, the Company changed its method of accounting for
income taxes as required by Statement of Financial Accounting Standards "SFAS"
No. 109, "Accounting for Income Taxes." As permitted by SFAS No. 109, the
Company has elected not to restate the consolidated financial statements of any
prior periods to apply the provisions of SFAS No. 109. The cumulative effect on
prior years of this change in accounting for income taxes as of May 1, 1993 and
the effect of this change on the provision for income taxes for the year ended
April 30, 1994 were not material.
Under SFAS No. 109, the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
17
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Significant components of the Company's deferred tax assets and liabilities
as of April 30 were as follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Deferred tax liabilities:
Accelerated tax depreciation..................... $4,362,000 $4,208,000
Other liabilities................................ 134,000 61,000
---------- ----------
Total deferred tax liabilities................. 4,496,000 4,269,000
Deferred tax assets:
Deferred compensation and Stock Awards........... 3,878,000 3,503,000
Inventory valuation differences.................. 1,012,000 1,608,000
Environmental reserves........................... 1,020,000 1,403,000
Other accruals................................... 1,596,000 1,641,000
Net operating loss carryforwards................. 165,000 165,000
---------- ----------
7,671,000 8,320,000
Less valuation allowance........................... 165,000 165,000
---------- ----------
Total deferred tax assets...................... 7,506,000 8,155,000
---------- ----------
Net deferred tax assets........................ $3,010,000 $3,886,000
========== ==========
Net current deferred tax assets.................... $3,029,000 $3,601,000
Net noncurrent deferred tax assets (liabilities)... (19,000) 285,000
---------- ----------
$3,010,000 $3,886,000
========== ==========
</TABLE>
Federal and state income taxes on income consisted of the following:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Current:
Federal............................. $14,115,000 $11,726,000 $ 9,994,000
Foreign............................. 696,000 324,000 161,000
State............................... 2,997,000 2,525,000 2,095,000
----------- ----------- -----------
17,808,000 14,575,000 12,250,000
Deferred.............................. 792,000 150,000 250,000
----------- ----------- -----------
$18,600,000 $14,725,000 $12,500,000
=========== =========== ===========
</TABLE>
A reconciliation of the consolidated provisions for income taxes to amounts
determined by applying the prevailing statutory federal income tax rate of 35%
to pretax earnings is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Income tax at statutory rate...... $17,841,000 $14,296,000 $11,717,000
Effect of:
State income taxes.............. 2,026,000 1,641,000 1,362,000
Foreign operations with lower
statutory rates................ (736,000) (865,000) (444,000)
Other--net...................... (531,000) (347,000) (135,000)
----------- ----------- -----------
Income tax provision.............. $18,600,000 $14,725,000 $12,500,000
=========== =========== ===========
</TABLE>
18
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company paid income taxes of approximately $16,840,000 in 1996,
$13,980,000 in 1995 and $9,885,000 in 1994. No provision has been made for
income taxes of approximately $5,645,000 at April 30, 1996 which would be
payable should undistributed net income of $14,478,000 of foreign operations
be distributed as dividends, as the Company plans to continue these foreign
operations and does not contemplate such distributions in the foreseeable
future.
7. ENVIRONMENTAL MATTERS
The Company is involved in environmental investigation and/or remediation at
certain of its present plant sites. The Company is not yet able to determine
when such remediation activity will be complete.
At April 30, 1996 and 1995, the Company had accruals, primarily based upon
independent engineering studies, for environmental matters of approximately
$3,050,000 and $4,000,000, respectively. The Company believes the provisions
it has made for environmental matters are adequate to satisfy its liabilities
relating to such matters.
In 1996, the Company spent $931,000 on remediation cleanups and related
studies compared with $1,615,000 in 1995 and $502,000 in 1994. In 1996, the
costs associated with environmental matters as they relate to day-to-day
activities were not material.
8. PENDING LITIGATION
Certain litigation arising in the normal course of business is pending
against the Company. The Company is of the opinion that the resolution of such
litigation will not have a significant effect on the consolidated financial
statements of the Company.
9. DESCRIPTION OF BUSINESS
The Company operates in one industry segment, which consists of the
manufacture of electronic components that connect, convey and control
electrical energy, pulse and signal, including connectors, interconnect
devices, controls, printed circuits and current-carrying distribution systems.
The Company manufactures products with applications in the automotive,
computer, voice and data communications, industrial, military and aerospace,
and consumer electronics industries.
Sales to two automotive customers approximated 40%, 42% and 45% of net sales
from continuing operations in the years ended April 30, 1996, 1995 and 1994,
respectively.
At April 30, 1996 and 1995, accounts receivable from customers in the
automotive industry were approximately $27,831,000 and $22,147,000,
respectively. Receivables are generally due within 30 days. Credit losses
relating to all customers consistently have been within management's
expectation.
19
<PAGE>
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Information about the Company's operations in different geographic regions
is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Net sales:
Domestic........................ $252,624,190 $226,024,411 $185,898,114
Far East........................ 24,630,167 18,931,172 17,981,519
Europe.......................... 30,284,109 25,792,265 9,418,213
------------ ------------ ------------
$307,538,466 $270,747,848 $213,297,846
============ ============ ============
Operating profit:
Domestic........................ $ 45,551,070 $ 37,237,411 $ 31,254,421
Far East........................ 1,898,117 55,404 1,756,373
Europe.......................... 1,504,735 2,421,373 56,857
Income and expenses not
allocated to areas............. 2,018,692 1,132,201 408,776
------------ ------------ ------------
$ 50,972,614 $ 40,846,389 $ 33,476,427
============ ============ ============
Assets:
Domestic........................ $179,178,383 $155,850,737 $134,838,931
Far East........................ 29,415,698 23,434,566 21,262,994
Europe.......................... 14,685,292 12,210,592 4,528,439
------------ ------------ ------------
$223,279,373 $191,495,895 $160,630,364
============ ============ ============
</TABLE>
10. SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of unaudited quarterly results of operations for
the two years ended April 30, 1996.
<TABLE>
<CAPTION>
FISCAL YEAR 1996
QUARTER ENDED
-----------------------------------------------
JULY 31 OCTOBER 31 JANUARY 31 APRIL 30
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales................ $68,215,814 $78,638,261 $75,731,809 $84,952,582
Gross profit............. 18,625,040 21,352,888 20,687,894 25,267,359
Net income............... 6,703,446 7,585,187 7,554,626 10,529,355
Net income per Common
Share................... .19 .22 .22 .30
<CAPTION>
FISCAL YEAR 1995
QUARTER ENDED
-----------------------------------------------
JULY 31 OCTOBER 31 JANUARY 31 APRIL 30
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales................ $57,763,484 $66,783,591 $67,386,826 $78,813,947
Gross profit............. 16,782,481 17,788,071 17,877,752 21,083,896
Net income............... 5,828,945 5,990,362 5,964,812 8,337,270
Net income per Common
Share................... .17 .17 .17 .24
</TABLE>
20
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<C> <S> <C>
3.1 Certificate of Incorporation of Registrant, as amended
and currently in effect(1)
3.2 By-Laws of Registrant, as amended and currently in
effect(1)
4.1 Article Fourth of Certificate of Incorporation of
Registrant, as amended and currently in effect
(Included in Exhibit 3.1)
10.1 Methode Electronics, Inc. Employee Stock Ownership Plan
dated February 24, 1977(2)*
10.2 Methode Electronics, Inc. Employee Stock Ownership Plan
and Trust Amendment No. 1(2)*
10.3 Methode Electronics, Inc. Employee Stock Ownership
Trust(2)*
10.4 Methode Electronics, Inc. Employee Stock Ownership
Trust--Amendment No. 1(2)*
10.5 Methode Electronics, Inc. Incentive Stock Award
Plan(3)*
10.6 Methode Electronics, Inc. Supplemental Executive
Benefit Plan(4)*
10.7 Methode Electronics, Inc. Managerial Bonus and Matching
Bonus Plan (also referred to as the Longevity
Contingent Bonus Program)(4)*
10.8 Methode Electronics, Inc. Capital Accumulation Plan(4)*
10.9 Incentive Stock Award Plan for Non-Employee
Directors(5)*
10.10 Methode Electronics, Inc. 401(k) Savings Plan(5)*
10.11 Methode Electronics, Inc. 401(k) Savings Trust(5)*
10.12 Methode Electronics, Inc. Electronic Controls Division
Cash and Class A Common Stock Bonus Plan(6)*
11 Computation of Earnings per Common Share 22
21 Subsidiaries of the Registrant 23
23.1 Consent of Ernst & Young LLP 24
27 Financial Data Schedules 25
</TABLE>
- --------
(1) Previously filed with Registrant's Form S-3 Registration Statement No. 33-
61940 filed April 30, 1993 and incorporated herein by reference.
(2) Previously filed with Registrant's S-8 Registration Statement No. 2-60613
and incorporated herein by reference.
(3) Previously filed with Registrant's Registration Statement No. 2-92902
filed August 23, 1984 and incorporated herein by reference.
(4) Previously filed with Registrant's Form 10-Q for three months ended
January 31, 1994 and incorporated herein by reference.
(5) Previously filed with Registrant's Form 10-K for the year ended April 30,
1994 and incorporated herein by reference.
(6) Previously filed with Registrant's S-8 Registration Statement No. 33-88036
and incorporated herein by reference.
*Management contract or compensatory plan or arrangement required to be filed
as an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c) of
Form 10-K.
21
<PAGE>
Exhibit 11 - Computation of Earnings Per Common Share
Methode Electronics, Inc. And Subsidiaries
The following table illustrates that the vesting of the unamortized Stock Awards
had no material dilutive effect on reported earnings per common share.
<TABLE>
<CAPTION>
Year ended April 30
1996 1995 1994
---------------------------------------------
<S> <C> <C> <C>
Primary earnings per common share:
Average common shares outstanding 34,967,000 34,671,000 34,506,000
Unamortized Stock Award common
shares 130,000 144,000 152,000
Shares assumed to be repurchased under
treasury stock method at average
market price (100,000) (126,000) (111,000)
---------- ---------- --------
Total 34,997,000 34,689,000 34,547,000
========== ========== ==========
Net income $32,372,614 $26,121,389 $20,976,427
========== ========== ===========
Per common share amount $ .93 $ .75 $ .61
=== === ===
Fully diluted earnings per share:
Average common shares outstanding 34,967,000 34,671,000 34,506,000
Unamortized Stock Award common
shares 130,000 144,000 152,000
Shares assumed to be repurchased under
treasury stock method at the higher of
average or year-end market price (88,000) (120,000) (93,000)
---------- ---------- ---------
Total 35,009,000 34,695,000 34,565,000
========== ========== ==========
Net income $32,372,614 $26,121,389 $20,976,427
========== ========== ===========
Per common share amount $ .92 $ .75 $ .61
=== === ===
</TABLE>
22
<PAGE>
Exhibit 21 - Subsidiaries of the Registrant
Methode Electronics, Inc. and Subsidiaries of the Registrant
Jurisdiction of
Subsidiary (1) Incorporation
- -------------- -------------
Graphic Research, Inc. California
Intertrace Technology, Inc. Delaware
Methode of California (2) California
Methode Development Company Delaware
Methode Duel, Inc. Delaware
Methode Electronics Europe, Ltd. Scotland
Methode Electronics Far East, PTE, Ltd. Singapore
Methode Electronics Ireland Limited Ireland
Methode Electronics Suzhou Co., Ltd. China
Methode Fibre Optic Products PTY, Ltd. Australia
Methode Mikon Ltd. England
Methode New England Co., Inc. Delaware
Methode Technical Components Delaware
(1) All subsidiaries 100% owned
(2) Business also done under the names Trace Laboratories Central and Trace
Laboratories East.
23
<PAGE>
Exhibit 23.1 - Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-88036) and in the Registration Statement (Form S-3 No. 33-61940), as
amended, and related Prospectus, of Methode Electronics, Inc. of our report
dated June 18, 1996, with respect to the consolidated financial statements of
Methode Electronics, Inc. included in this Annual Report (Form 10-K) for the
year ended April 30, 1996.
ERNST & YOUNG LLP
Chicago, Illinois
July 25, 1996
24
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